Can an SBA 7(a) loan have a fixed interest rate?
Short answer
Yes. SOP 50 10 8.1, Appendix 18 allows fixed or variable rates. The maximum fixed rate is the Prime rate on the first business day of the month plus an allowable spread that SBA publishes.
A 7(a) loan may carry a fixed rate under 13 CFR § 120.213 and SOP 50 10 8.1, Appendix 18, Para. A.1 (p. 395). SBA does not require a lender to offer one, so availability varies by lender.
How the fixed maximum works
The maximum fixed rate is the Prime rate on the first business day of the month plus an allowable spread that SBA publishes. SBA publishes it in the Federal Register and lists current figures on its Fiscal Transfer Agent Wiki. Those figures move with Prime, so this page does not repeat them.
The rate must stay fixed for the whole term
A lender may use the maximum fixed rate only if that rate stays in effect for the entire term, with no adjustment or reset. A rate that resets later falls under the variable caps instead.
What your Note must show
- A fixed-rate Note must state the specific interest rate (Appendix 18, Interest Rate Requirements for an SBA Note).
- The payment must fully amortize the loan by the maturity date (Appendix 18, Amortization).
A fixed rate does not change when Prime moves. If you later pay the loan off early, check whether the SBA prepayment fee applies.
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